Private Placements Usually Have Several Advantages Associated with Them,but Also

question 127

Multiple Choice

Private placements usually have several advantages associated with them,but also tend to suffer from specific disadvantages.Which of the following is a disadvantage of a private placement when compared to other methods of selling new securities?

• A) strictly standardized features/terms
• B) higher interest costs
• C) reduced flotation costs
• D) avoidance of registration with the SEC

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Definitions:

Court

A governmental institution that has the authority to adjudicate legal disputes between parties and administer justice in civil, criminal, and administrative matters.

Creditors' Committee

A group of representatives from a bankrupt company's unsecured creditors involved in the bankruptcy proceedings to protect their interests.

Unsecured Creditors

are creditors whose claims are not protected by a lien on specific assets of the debtor, making them more vulnerable in bankruptcy proceedings.

Chapter 11

A provision of the United States Bankruptcy Code that provides for reorganization, typically involving a corporation or partnership.